The cost of floating payments for wages and invoices represents $208 billion in excess cost to the construction industry, a 53% increase from 2021, according to a survey by Rabbet, a provider of construction finance software.
Those costs are passed on to real estate developers and financiers in the form of project delays, added risk, and higher bids from contractors.
Other survey findings include:
- 37% of all respondents report that work has been delayed or stopped due to a delay in payments to crew members
- 62% of general contractors incurred billing charges, financing charges, or other costs when floating payments to others
- There was an 8.5x increase in general contractors using retirement savings to float payments for their business
Though a 53% increase in the cost of slow payments in one year is major, it’s on par when considering the current economic environment, according to a Rabbet news release.
Some contractors said they are boosting their bids 5-10% to help absorb associated costs and are “pickier when selecting bids because of increasing labor and supply prices.”
Related Stories
| Apr 16, 2012
University of Michigan study seeks to create efficient building design
The result, the researchers say, could be technologies capable of cutting the carbon footprint created by the huge power demands buildings place on the nation’s electrical grid.
| Apr 16, 2012
UNT lab designed to study green energy technologies completed
Lab to test energy technologies and systems in order to achieve a net-zero consumption of energy.
| Apr 16, 2012
Shawmut awarded Tag Heuer builds in Florida and Pennsylvania
Both projects are scheduled to be completed this spring.
| Apr 16, 2012
Batson-Cook breaks ground on senior living center in Brunswick, Ga.
Marks the third Benton House project constructed by Batson-Cook.
| Apr 16, 2012
Altoon + Porter Architects renamed Altoon Partners
The global practice, with offices in Los Angeles, Amsterdam, and Shanghai, specializes in retail, residential and mixed-use developments.
| Apr 16, 2012
Drake joins EYP as science and technology project executive
Drake’s more than 30 years of diversified design and project delivery experience spans a broad range of complex building types.
| Apr 16, 2012
$80 million in export financing for solar project in India
The project, “Rajasthan Sun Technique Energy Private Limited,” is a subsidiary of Reliance Power and is being co-financed by the Asian Development Bank and FMO, the Dutch development bank.
| Apr 13, 2012
Arcadis merges with Davis Langon & Seah
Merger will help company expand business in Asia.
| Apr 13, 2012
Goettsch Partners designs new music building for Northwestern
The showcase facility is the recital hall, an intimate, two-level space with undulating walls of wood that provide optimal acoustics and lead to the stage, as well as a 50-foot-high wall of cable-supported, double-skin glass
| Apr 13, 2012
Best Commercial Modular Buildings Recognized
Judges scored building entries on a number of criteria including architectural excellence, technical innovation, cost effectiveness, energy efficiency, and calendar days to complete, while marketing pieces were judged on strategy, implementation, and quantifiable results. Read More
